CHICAGO—The state’s harsh weather depressed home sales during the month of January, but median prices continued to increase, reinforcing what has become a long-term trend, according to data just published by the Illinois Association of REALTORS®.
“Last January, we were in the middle of much warmer winter,” Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory of the University of Illinois, tells GlobeSt.com. “This year, the last thing anyone wants to do is trump around outdoors looking at houses.”
A total of just 7,997 Illinois homes were sold during January, a significant drop from the 8,650 sold in January 2013. Furthermore, only 56,275 houses were on the market last month, down 19.9% compared to one year ago. However, the statewide median price was $136,950, up 9.6% from last year when the median price was $125,000.
“Severe winter weather and seasonal trends definitely affected sales in January,” says Phil Chiles, president of the realtors’ association and broker-associate with the Real Estate Group in Springfield. “Despite diminished traffic from buyers, prices remained robust and indications are that they will continue to show strength as we enter the spring selling season.”
Chicago’s nine-county metropolitan area also saw a decrease in sales. A total of 5,785 homes, including condominiums, were sold last month, down 8.9% from the previous January. But the median price of a metropolitan area home in January was $164,900, up 17.8% from $140,000 in January 2013. And the time it took to sell a home continued dropping with listings averaging 71 days until sale, an 18.4% decrease compared to the 87 days it took in January 2013.
“January’s activity is fairly typical for this time of year,” says Matt Farrell, president of the Chicago Association of REALTORS® and managing partner of Urban Real Estate. “A brutal winter doesn’t typically encourage home shopping fever in Chicago, and with inventory down 25%, the Chicago homes that did sell produced well above the median price by almost 28% percent to just over $200,000.”
“We might see a burst of selling once spring comes,” Hewings says, as a result of demand built up over the cold winter. In general, demand has increased because more people have entered the market for the first time after four or five years of widespread caution.
But the full picture is complex. “Overall, consumers are a little bit more optimistic about the economy,” Hewings adds, since possible government shutdowns have been averted, but job growth remains below what could be expected in strong recovery. “Median prices are going to continue increasing,” but the torrid pace of sales throughout much of last year, which surpassed the expectations of many, may slow sales a bit this year after that possible burst in the spring.